Financial Secretary
The Treasury
Falkland Islands Government
Stanley
Falkland Islands
Welcome Letter
Dear Candidate,
Thank you for your interest in applying for the post of Financial Secretary in the Falkland Islands Government. This truly is an exciting opportunity in an unparalleled location! The Islands themselves have a land mass of around two thirds the size of Wales and are set in an area of outstanding natural beauty in the South Atlantic. This is a small, but thriving society with a way of life very similar to that in the UK. There are also great local services, high employment and rapidly expanding economic growth.
The Islands are going through exciting times with a healthy balance sheet but ever growing demands for public services putting pressures on the operating budget and proposals for capital projects exceeding the funding available. In recent years, government finances have been bolstered from exploration in our frontier oil and gas fields, high squid revenues and a healthy globally diversified investment portfolio. This has enabled significant funds to be put into projects to diversify the economy, develop infrastructure and improve the quality of life of residents.
However, the Islands haven’t escaped the general public sector need to closely manage budgets and with operating expenditures currently 3% in excess of recurring revenues, volatile revenue streams and a low oil price we are looking for a strong Chief Financial Officer to form a key member of our Corporate Management Team and Executive Council and progress forward our longer term financial planning and strategies to ensure balances continue to be well managed and ensure delivery of high quality public services.
For those with a sense of adventure, the Islands provide opportunities which are hard to match elsewhere in the world. Similarly the Islands are an excellent retreat, with unspoiled landscapes and a vibrant community focused lifestyle. By taking time to understand and appreciate the Islands’ special culture and heritage, you can be assured of a once in a lifetime experience in this role.
If you have drive, initiative and a sense of adventure, coupled with a successful track record in leading public sector financial management, then we would be delighted to share our excitement for the Islands with you.
Yours sincerely,
Barry Rowland
Chief Executive
Information for candidates
The Treasury
Vision
To provide world class public financial management services.
Mission
To achieve the Medium Term Financial Plan whilst simultaneously addressing aspirations for new developments and improved services in an efficient, reliable and customer friendly manner.
Key drivers
The Falkland Islands have been affected by global financial trends, variable Illex fishing revenues and economic pressure from Argentina. More recently, revenues have been received as a result of oil exploration activities and progression towards development is in the early stages. Uncertainty regarding the timing of any development and exploitation of hydrocarbons makes financial planning complex. Although Government finances are underpinned by substantial reserves, achieving the medium term financial plan whilst simultaneously addressing aspirations for new developments and improved services requires some difficult financial choices. With a Budget Strategy for the medium term in place the organisation needs to focus on the longer term financial sustainability of FIG and the Falkland Islands in general. The Treasury play a key role in informing such choices.
The Treasury exists to provide a full range of financial and fiscal services in accordance with the legislative and regulatory framework of the Falkland Islands. These services comply with appropriate accounting standards and best practice, in order to assist departments in the provision of services to the Islands’ residents. It is imperative that all departments have access to sound financial advice and support when making decisions and identifying policy options.
The Islands Plan details the Falkland Islands overall policy agenda and development strategy, in the form of ten outcomes.
Importantly the plan recognises the following before outlining priorities:
We remain committed to responsible management of the Government budget and will ensure that we maintain a sufficient level of financial reserves to provide security, and avoid creating unsustainable deficits. We will seek to deliver greater value for money from existing resources, whilst delivering the infrastructure and services that are needed for the future.
Treasury supports the whole Islands Plan through the delivery of its services. However, the following priorities are key drivers:
· Priority 1 - Self-Determination and Good-Governance: Agree a sustainable budget strategy for the Falkland Islands Government that will include maintaining reserves at a level that provides security for Falkland Islanders.
· Priority 2 – Economic Development: Create the conditions to ensure the successful development of an oil and gas industry in the Falkland Islands, providing clear policy and legislative frameworks.
· Priority 2 – Economic Development: Prepare a detailed plan for the management and use of potential hydrocarbons revenues in the form of a Sovereign Wealth Fund.
· Priority 3 – Population and Workforce: Ensure that all FIG departments prepare and implement workforce development and succession plans to delivery skills development and career progression for local people.
· Priority 9 – Community and Culture: Continue to ensure the needs of those earning low incomes are considered during the annual budget cycle, and focus effort on addressing the underlying causes of low earnings in society.
· Priority 9 – Community and Culture: Consider measures to ensure that there is an equitable distribution of national wealth.
Overview of the services provided by the Directorate
Finance
Financial Management
Provision of Financial Information and Support
· Provision of information for budgetary control & maintenance;
· Monitoring and reporting movement of the Stanley retail price index;
· Preparation of statutory reporting including financial statements;
· Providing a full financial planning, accounting and reporting service for the Government of South Georgia and the South Sandwich Islands (GSGSSI).
Formulation of Fiscal Policy, Financial Strategies and Annual Budgets
· Proposing Budget Strategy
· Co-ordination of the Medium Term Financial Plan (MTFP) and Long Term Financial Plan (LTFP);
· Facilitating the preparation of the annual budget;
Provision of Financial and Fiscal Strategy and Policy Advice and Research
· Management of the Standing Finance Committee/Budget Select Committee;
· Participation in various committees, sub-committees, working parties and advisory boards;
Ensuring Appropriate Financial Governance Structures are in place
· Preparation of Annual Governance Statement;
· Reviewing best practice on Corporate Governance;
· Undertaking banking regulation;
Exchequer
Provision of Central Exchequer Services
· Investment management;
· Maintenance of financial records and production of Statutory Annual Accounts;
· Collection and recording of amounts due to the government;
· Administration of Rent, Service Charge and subvention services;
· Administration of postmaster services including family allowances;
· Provision of central banking reserves for Falkland Islands currency and the minting of commemorative coins;
· Payment of all suppliers, contractors, employees and members of the public;
· Provision of rent/service charge rebates to FIG tenants;
· Management of the Working Credit and Childcare Credit schemes;
· Administration of insurance contracts.
Pensions
Maintenance and Management of Pension Funds
· Administration of three pension schemes;
· Management of winter fuel and contribution credit schemes;
· Liaison with actuaries, external auditors and Pensions Boards.
Taxation
Administration of tax systems
· Provision of policy advice and proposals on the setting of Taxes legislation;
· Administration of personal, corporation and medical services tax for FIG;
· Administration of personal tax system for South Georgia.
Internal Audit
Provision of Internal Audit services
· Development and implementation of a risk-based internal audit plan;
· Liaison with the Public Accounts Committee and external auditors;
· Development of a system for risk management;
· Undertaking internal control audits with FIG and associated bodies;
· Preparation of the Annual Governance Statement;
· Ad-hoc fraud and other investigations.
Treasury 2016/17 Key Priorities· Approval of the 2017/18 – 2021/22 Budget and Projections (including review of existing budget strategies and principles)
· Approval of a Capital Investment Strategy to finance the National Infrastructure Plan
· Drafting Long Term Financial Plan
· Definition of further rural policy proposals for tax incentives for economic development
· Annual review of Oil & Gas legislation to ensure fit for purpose
· Continuation of reviews of pensions policy relating to flexible drawdowns
· Ensuring an appropriate public financial management framework is in place (including review of financial reporting standards)
· Removing barriers to businesses accessing UK banking services
Treasury Organisation
An organisation chart is attached at Appendix A. The Treasury is currently staffed by 25 officers who provide a full range of financial services to all government departments, elected Members and members of the public.
Key Positions
The senior management team of the Treasury Directorate consists of the following roles:
Director
Financial Secretary (Chief Financial Officer) – The prime function of the Financial Secretary, as the Chief Financial Officer for FIG, Head of the Treasury, Commissioner of Taxation, and a non-voting member of both Legislative Assembly and Executive Council, is the formulation and evaluation of fiscal strategies and policies, and to ensure that the Government has sound and efficient procedures of financial and management control. The Financial Secretary is also Chairman of the Retirement Pensions Board of Management and is one of three Commissioners of Currency.
Heads of Service
Head of Finance – The Head of Finance is responsible for the operational management and oversight of the Treasury and for the provision of an efficient and effective accounting and exchequer service for the Falkland Islands Government. This includes the preparation, monitoring and control of the Government’s budget and the capital programme. She is also responsible for the preparation and publication of the final accounts in the role of Treasurer and is the Deputy Commissioner of Taxation. The Head of Finance deputises for the Financial Secretary in their absence.
Head of Tax – The Tax Office is a sub-department of the Treasury. The Head of Tax is responsible for leading policy and strategy advice in taxation and the operational management and oversight of the Taxation Office. This includes the responsibility for all aspects of Taxation Office work from the preparation of the business plan and budget for the service, providing policy and strategy advice, the implementation of the objectives set out in it and monitoring and performance throughout the year. This role reports to the Deputy Commissioner of Taxation.
Chief Internal Auditor – The Chief Internal Auditor is responsible for the operational management of the Internal Audit section as a sub-department of the Treasury. The section is responsible for the examination and evaluation of the adequacy and effectiveness of the organisation's governance, risk management, and internal control processes in relation to the organisation's defined goals and objectives. The Chief Internal Auditor reports directly to Financial Secretary.
FIG Staff Numbers
FIG has an overall establishment of around 650 officers who provide the full range of public services common to both central and local government in the United Kingdom plus other services such as internal air transport and utility provisions.
Finances and Governance
The financial climate of the Islands has changed dramatically over the last 30 years developing from a public sector budget of around £2 million from an economy based solely on sheep farming. From Government’s ability to obtain revenue mainly through the issue of licences to foreign fishing vessels to fish within the Zone, revenue increased in the late 1980s to £19 million and since then, has averaged around £60 million per year (though some recent years has exceeded this, predominantly due to oil exploration). The traditional industries of fishing, agriculture and tourism show steady growth though there are increasing concerns on the volatility of the Illex squid fishery. The Falkland Islands are self-sufficient in all areas except defence.
Recent discovery of oil within the Falklands economic area are hoped to result in significant taxation receipts and royalties in the future though at present the development is awaiting sanction by the operator. With oil prices at a low level the Falkland Islands Government are keen to ensure the public sector budget is sustainable without reliance on potential future royalties from hydrocarbons and therefore have a Budget Strategy and Medium Term Financial Plan that provides for a sustainable organisation for at least 5 years without hydrocarbons revenues.
Falkland Islands’ residents enjoy a favourable income tax regime (as detailed later). The only form of indirect taxation is customs import duty on tobacco and alcohol. There is no VAT, stamp duty, death duty, property tax or capital gains tax.
Challenges for the Future
The Budget Strategy in place covers the provision of public services, National economic policy and Social fiscal policy. The current Budget strategy principles are as follows:
Some key supporting policies for the 2016/17 budget are:
Policy 3-1 “That uncommitted reserves of at least 2.5 times departmental spend will be maintained”.
Policy 4-1 “That public service budgets are maintained at the current level for 5 years”
Policy 4-4: “The total wage bill for each directorate will not increase in real terms from the existing provision for 2015/16 unless the directorate can demonstrate how this will be funded by additional revenue”
Policy 4-5: “Budget Select Committee will not consider requests for new posts unless absolutely critical and subject to there being sufficient housing in place and compliance with Policy 4-4”
The Budget Strategy sets out the need for a suite of strategies to be able to deliver the organisations aims set out in the Islands Plan and ensure a sustainable financial future for the Islands as follows:
§ Overarching Budget Strategy (approved 2014/15, re-affirmed annually);
§ Medium Term Financial Plan (rolling, approved annually);
§ Long Term Financial Plan;
§ Capital Investment Strategy; and